Health carriers requirement to offer reference-based pricing health plans

A bill for an act

relating to insurance; requiring health carriers to offer reference-based pricing

health plans; prohibiting open-ended promise-to-pay contracts; establishing a

provider number framework; authorizing rulemaking; amending Minnesota Statutes

2024, sections 62J.81, by adding a subdivision; 62J.826, subdivision 1, by adding

subdivisions; proposing coding for new law in Minnesota Statutes, chapters 62J;

62K.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

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[62J.809] HOSPITAL-ASSOCIATED INFECTION COSTS.

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Subdivision 1.

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Definitions.

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(a) For purposes of this section, the following terms have

the meanings given.

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(b) "Health care facility" means any hospital, ambulatory surgical center, or other inpatient

or outpatient facility where patients receive medical treatment.

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(c) "Hospital-associated infection" or "HAI" means any infection that a patient acquires

during the course of receiving treatment in a health care facility that was not present or

incubating at the time of admission, including but not limited to:

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(1) surgical site infections;

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(2) catheter-associated urinary tract infections;

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(3) central line-associated bloodstream infections;

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(4) ventilator-associated pneumonia;

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(5) clostridioides difficile infections; and

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(6) other health care-associated infections, as defined by the Centers for Disease Control

and Prevention.

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(d) "Treatment costs" means all costs associated with diagnosing, treating, and managing

an HAI, including but not limited to extended hospitalization, additional procedures,

medications, laboratory tests, and follow-up care.

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Subd. 2.

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Prohibition on charging for HAI treatment.

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(a) No health care facility shall

charge, bill, or seek payment from any patient or payer for the treatment costs of any HAI.

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(b) This prohibition applies regardless of whether the patient has private health insurance,

is self-pay, or has any other form of nongovernmental coverage.

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(c) The prohibition in paragraph (a) includes:

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(1) all facility charges associated with extended hospitalization due to HAI;

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(2) all professional services rendered to treat the HAI;

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(3) all medications, laboratory tests, imaging, and other diagnostic services related to

HAI treatment;

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(4) all rehabilitation or follow-up care necessitated by the HAI; and

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(5) any charges from subcontractors treating the HAI.

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(d) The health care facility where the HAI was acquired shall bear full financial

responsibility for all treatment costs, regardless of where subsequent treatment is provided.

If the facility where the HAI was acquired is not qualified to treat the HAI in its facility,

the facility is financially liable for the cost of treatment at another facility.

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Sec. 2.

Minnesota Statutes 2024, section 62J.81, is amended by adding a subdivision to

read:

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Subd. 3.

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Prohibition on open-ended promise-to-pay contracts.

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(a) For purposes of

this subdivision, "open-ended promise-to-pay contract" means any agreement that obligates

a patient to pay for health care services without prior disclosure of the specific amount to

be charged.

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(b) A health care provider is prohibited from requesting a patient to sign an open-ended

promise-to-pay contract.

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(c) All open-ended promise-to-pay contracts are void and unenforceable, except that

open-ended promise-to-pay contracts executed before July 1, 2026, are not enforceable for

services rendered on or after that date.

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(d) Notwithstanding this subdivision, health care providers are permitted to require

patients to sign agreements acknowledging financial responsibility only if the agreements:

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(1) specify the provider's number, as defined in section 62J.826, subdivision 4;

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(2) identify any services that may not be covered by insurance; and

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(3) disclose the estimated patient responsibility based on the provider's number and the

patient's insurance coverage.

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Sec. 3.

Minnesota Statutes 2024, section 62J.826, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) The definitions in this subdivision apply to this section.

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(b) "Baseline" means the allowable reimbursement amount for any health care service

or item in the medical assistance program as established by the commissioner of human

services.

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(b)
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(c)
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"CDT code" means a code value drawn from the Code on Dental Procedures and

Nomenclature published by the American Dental Association.

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(c)
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(d)
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"Chargemaster" means the list of all individual items and services maintained by

a medical or dental practice for which the medical or dental practice has established a charge.

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(d)
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(e)
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"Commissioner" means the commissioner of health.

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(e)
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(f)
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"CPT code" means a code value drawn from the Current Procedural Terminology

published by the American Medical Association.

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(f)
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(g)
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"Dental service" means a service charged using a CDT code.

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(g)
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(h)
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"Diagnostic laboratory testing" means a service charged using a CPT code within

the CPT code range of 80047 to 89398.

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(h)
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(i)
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"Diagnostic radiology service" means a service charged using a CPT code within

the CPT code range of 70010 to 79999 and includes the provision of x-rays, computed

tomography scans, positron emission tomography scans, magnetic resonance imaging scans,

and mammographies.

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(i)
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(j)
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"Hospital" means an acute care institution licensed under sections
144.50
to
144.58
,

but does not include a health care institution conducted for those who rely primarily upon

treatment by prayer or spiritual means in accordance with the creed or tenets of any church

or denomination.

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(j)
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(k)
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"Medical or dental practice" means a business that:

(1) earns revenue by providing medical care or dental services to the public;

(2) issues payment claims to health plan companies and other payers; and

(3) may be identified by its federal tax identification number.

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(l) "Number" means the percentage of the baseline that a provider accepts as full payment

for all services and items, expressed as a whole number, calculated in accordance with

subdivision 4.

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(k)
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(m)
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"Outpatient surgical center" means a health care facility other than a hospital

offering elective outpatient surgery under a license issued under sections
144.50
to
144.58
.

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(l)
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(n)
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"Standard charge" means the regular rate established by the medical or dental

practice for an item or service provided to a specific group of paying patients. This includes

all of the following:

(1) the charge for an individual item or service that is reflected on a medical or dental

practice's chargemaster, absent any discounts;

(2) the charge that a medical or dental practice has negotiated with a third-party payer

for an item or service;

(3) the lowest charge that a medical or dental practice has negotiated with all third-party

payers for an item or service;

(4) the highest charge that a medical or dental practice has negotiated with all third-party

payers for an item or service; and

(5) the charge that applies to an individual who pays cash, or cash equivalent, for an

item or service.

Sec. 4.

Minnesota Statutes 2024, section 62J.826, is amended by adding a subdivision to

read:

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Subd. 4.

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Provider numbers.

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(a) By January 1, 2028, and each year thereafter, the

commissioner of health must, for each provider subject to this section, determine and publicly

publish the provider's number calculated in accordance with this subdivision.

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(b) The commissioner of health must calculate a provider's number by dividing each of

a provider's current standard charges under subdivision 2 by each charge's baseline,

multiplying the quotients by the percentage of the provider's total charges for which each

standard charge accounts, and adding the products.

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(c) For providers that render both facility-based and professional services, the

commissioner of health must calculate and disclose two separate numbers as follows:

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(1) a facility number for all hospital and facility charges, including inpatient, outpatient,

emergency room, and surgical facility services; and

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(2) a professional services number for all services provided by medical professionals,

including ambulatory surgical centers and clinical services.

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(d) Each provider must post the provider's number prominently in locations easily

accessible to and visible by patients, including on the provider's website.

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Sec. 5.

Minnesota Statutes 2024, section 62J.826, is amended by adding a subdivision to

read:

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Subd. 5.

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Consumer health information exchanges.

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(a) Privately operated online

platforms are authorized to aggregate data generated and provided to consumers and the

commissioner of health under this section and to display health care provider information,

including numbers, quality metrics, and patient reviews for consumer use.

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(b) Consumer health information exchanges under paragraph (a) must be owned,

controlled, and operated by private entities. Ownership, control, and operation by a health

care provider, health care system, health plan company, pharmaceutical manufacturer, or

medical device manufacturer is prohibited.

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(c) The commissioner of health must register consumer health information exchanges

under paragraph (a). To be registered as a consumer health information exchange under this

subdivision, an exchange must:

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(1) demonstrate technical capability to securely receive, store, and display health care

pricing and quality data;

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(2) meet the independence requirements in paragraph (b);

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(3) agree to display all provider data without bias or preferential treatment;

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(4) implement consumer privacy protections; and

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(5) maintain public accessibility to basic search functions without charge to consumers.

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Sec. 6.

Minnesota Statutes 2024, section 62J.826, is amended by adding a subdivision to

read:

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Subd. 6.

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Rulemaking.

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(a) The commissioner of health must promulgate rules to

implement subdivision 4. Rules promulgated under this paragraph must promote the following

goals:

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(1) establish a simple, universally understood number pricing system for all health care

services and items based on a single number representing the percentage of medical assistance

baseline rates;

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(2) expose the current hidden tax paid by private pay patients through public disclosure

of each provider's number;

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(3) create a consumer-friendly health care marketplace where patients can easily compare

prices and choose the patients' preferred providers;

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(4) enable competition among health care providers and health plan companies; and

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(5) eliminate surprise medical billing and price gouging.

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(b) The commissioner of health must promulgate rules to implement subdivision 5. Rules

promulgated under this paragraph must promote the following goals:

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(1) establish a framework for privately operated consumer health information exchanges;

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(2) require health care providers to submit standardized data to registered exchanges;

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(3) enable consumers to compare health care providers based on price, quality, and

patient reviews; and

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(4) protect consumer privacy while facilitating information sharing.

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Sec. 7.

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[62K.16] REFERENCE-BASED PRICING HEALTH PLAN.

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Subdivision 1.

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Definitions.

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(a) For purposes of this section, the following terms have

the meanings given.

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(b) "Provider" has the meaning given in section 62J.03, subdivision 8.

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(c) "Reference-based pricing health plan" means a health plan in which the payer pays

a set price for each service instead of negotiating prices with providers.

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Subd. 2.

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General.

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Notwithstanding any law to the contrary and upon any necessary

federal approval, a health carrier that offers a health plan in the individual, small, or large

group market must also offer in the market a reference-based pricing health plan that meets

the requirements of this section.

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Subd. 3.

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Provider participation.

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(a) An enrollee of a reference-based pricing health

plan may access any health care provider who has agreed to: (1) a reimbursement rate up

to but not greater than the reimbursement rate specified in the enrollee's reference-based

pricing plan; and (2) any other terms and conditions offered by the health carrier. Any terms

and conditions offered by the health carrier must be the same for all health care providers

who agree to participate in the health plan.

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(b) A health carrier may require a participating provider to meet reasonable data,

utilization review, and quality assurance requirements.

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(c) A provider who agrees to participate must provide services to all enrollees of the

reference-based pricing plan if the provider's reimbursement rates are equal to or less than

the reimbursement rate specified in the enrollee's reference-based pricing plan.

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Subd. 4.

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Reimbursement rates.

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(a) The reimbursement rates offered to providers that

agree to participate in a reference-based pricing health plan must be based on a percentage

relative to the rates defined by the most recent medical assistance fee-for-service

reimbursement fee schedules promulgated by the Department of Human Services.

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(b) For services that do not have a corresponding medical assistance fee-for-service

reimbursement value, the health carrier must negotiate the rates based on other fee schedules

used within the health care market.

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(c) If a reference-based pricing health plan's reimbursement rate is at least 190 percent

above the medical assistance fee-for-service rate and the health plan is offered in all counties

in Minnesota, the health plan is exempt from the geographic and network adequacy

requirements under section 62K.10.

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(d) A provider who agrees to participate in the reference-based pricing plan agrees to

accept the reimbursement rate as payment in full under the terms of the plan in accordance

with section 62K.11.

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Subd. 5.

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Conditions.

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(a) Nothing in this section requires a provider to participate in a

reference-based pricing health plan. A health carrier is prohibited from requiring the provider

to participate in a reference-based pricing health plan as a condition of participation in any

other health plan, product, or other arrangement offered by the health carrier.

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(b) Nothing in this section requires a health carrier to provide coverage for a service or

treatment that is not covered under the enrollee's health plan.

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(c) A reference-based pricing health plan may impose cost-sharing requirements,

including co-payments, deductibles, and coinsurance and reasonable referral and prior

authorization requirements.

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(d) Reference-based pricing health plans must cover all chiropractic services and items

provided to enrollees who are 21 years of age or younger.

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